HomeMy WebLinkAbout1979-322
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RESOLUTION NO. 7~-_::?3 c;;...
2 RESOLUTION OF THE CITY OF SAN BERNARDINO ADOPTING A REVISED
DEFERRED COMPENSATION PLAN.
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WHEREAS, Resolution No. 11817 established a Deferred
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Compensation Plan for certain employees of the City; and
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WHEREAS, the Plan has subsequently been modified and
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revised; and
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WHEREAS, it is now desired to revise the Plan in accordance
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with Exhibit "A" attached hereto,
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NOW, THEREFORE, BElT RESOLVED BY THE MAYOR AND COMMON
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COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
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SECTION 1. City's Deferred Compensation Plan as
established by Resolution No. 11817, and subsequently amended and
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14 revised, is revised to read as set forth in Exhibit "A" attached
15 hereto and incorporated herein by reference as though set forth
16 at length.
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SECTION 2. The City Administrator is hereby authorized to
18 execute all Deferred Compensation participation agreements with
19 said employees and other eligible officials and officers, which
20 are necessary for the participation of said persons in the Plan,
21 except that any Deferred Compensation participation agreement for
22 said designated official shall be executed by the Mayor.
23
SECTION 3. The Finance Director is hereby directed to
24 transmit the revised Plan to the appropriate authorities of the
25 United States Internal Revenue Service for review and approval.
26 I HEREBY CERTIFY that the foregoing resolution was duly
27 adopted by the Mayor and Common Council of the City of San
28
Bernardino at a
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meeting thereof, held
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resolution is
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vote, to wit:
day of
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ABSENT:
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of
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1979.
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, 1979, by the following
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DEFERRED COMPENSATION PLAN
FOR
CITY OF SAN BERNARDINO
SECTION 1. NAME:
The name of the Plan is the City of San Bernardino, California,
Deferred Compensation Plan (hereinafter referred to as the Plan).
SECTION 2. PURPOSE:
The primary purpose of the Plan is to attract and hold personnel
by permitting them to enter into agreements with the City of San
Bernardino which will provide for deferral of payment of a portion
of their current compensation until death, disability, retirement,
termination of employment, or other event as provided herein, in
accordance with the provisions of Sections 53212 - 53214 of the
Government Code of the State of California, and the applicable
provisions of the Internal Revenue Code.
SECTION 3. DEFINITIONS:
For the purposes of this Plan, certain words and phrases used here-
in will have the following meanings:
3.1 "Employer" shall be the City of San Bernardino.
3.2 "Employee" shall mean only those individuals who perform
service for the Employer as either a common law employee or
an independent contractor.
3.3 "Participant" shall mean any employee who fulfills the re-
quirements of enrollment into this Plan.
3.4 "Participation Agreement" shall mean the agreement executed
and filed by an employee with the employer pursuant to
Section 4, in which the employee elects to become a partici-
pant in the Plan.
3.5 "Includible Compensation" shall mean compensation for service
performed for the employer which (taking into account the
provisions of Sections 457 and 403(b) of the Internal Revenue
Code) is currently includible in gross income. Amounts of
compensation shall be determined without regard to any
community property laws.
3.6 "Employment Period" shall mean any calendar month.
3.7 "Disability" shall mean the complete and permanent inability
of a participant to engage in his usual occupation by reason
of a medically determinable physical or mental impairment
as determined solely by the Employer on the basis of advice
from a physician or physicians.
3.8 "Normal Retirement Date" shall mean the later of:
A. The normal retirement age specified in any other retire-
ment plan maintained for the employee by the employer, or
B. The date the employee attains age 70.
SECTION 4. PARTICIPATION IN THE PLAN:
4.1 A Participation Agreement shall be effective for the first
employment period following its execution and filing with the
employer. The Participation Agreement shall continue from
period to period and remain in full force and effect unless
terminated as provided in Section 4.2.
4.2 A participant may terminate his participation in the Plan,
and thereby terminate further deferral of his compensation,
by filing with the employer an executed written notice of
termination at least 30 days prior to effective date of
termination. Once terminated, a former participant cannot
rejoin the Plan during the employment period in which ter-
mination occurred; however, he may elect to become a partici-
pant in subsequent employment periods. No amounts shall be
payable to an employee upon terminating his participation in
the Plan unless otherwise due pursuant to Section 7.
4.3 A participant may select, pursuant to Section 6, one or more
investment objectives provided that the amount deferred for
each objective equals or exceeds the minimum of not less than
$10 per pay period.
SECTION 5. DEFERRAL OF COMPENSATION:
5.1 During each employment period in which the employee is a
participant in the Plan, the employer shall defer payment of
such part of his compensation as is specified by the employee
in his Participation Agreement provided that, except as pro-
vided in 5.2, the maximum that each participant may defer
under this Plan for any taxable year shall not exceed the
lesser of:
A. $7,500.00, or
B. 33 1/3% of the participant's Includible Compensation
(which equals 25% of the participant's gross compensation).
5.2 The maximum deferral described in 5.1 shall not be applicable
for one or more of the participant's last three taxable years
ending before the attainment of normal retirement age under
this Plan. In that instance, the maximum shall be the
lesser of:
A. $15,000.00, or
B. The sum of
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(i) The maximum deferral amount established for the
purposes of Section 5.1 for the taxable year (de-
termined without regard to this Section), plus
(ii) So much of the maximum deferral amount established
for the purposes of Section 5.1 for taxable years
before the taxable year as has not theretofore been
used under Section 5.1 or under this Section.
SECTION 6. ADMINISTRATION OF THE PLAN:
6.1 The Plan shall be administered by an elected Advisory
Committee and chaired by the Director of Finance who shall
be the sole authority to enforce the Plan and shall be
responsible for the operation of the Plan in accordance with
its terms, and shall determine all the questions arising out
of the administration, interpretation, and application of the
Plan, which determinations shall be conclusive and binding on
all persons.
6.2 The employer shall establish a deferred compensation fund to
which all deferred compensation shall be credited at such
times as the compensation would have been payable to individual
employees if not a participant of the Plan. Separate book
accounts will be established for each employee participant
which will show all amounts of deferred compensation, invest-
ments made, shares acquired and earnings and gains on invest-
ments. Each book account will be valued at least quarterly.
6.3 On executing the Participation Agreement, the employee shall
designate his investment objective prospectively only. The
employer may invest amounts of deferred compensation in mutual
fund shares, or interest deposits with a savings and loan
company or banking institutions, or investments with a stock-
broker, or life insurance and/or fixed/variable annuity con-
tract with an insurance company, whichever in the employer's
sole judgment will best achieve the employee's objectives.
The employee's investment designations are intended to be an
expression of mere investment preferences and do not obligate
the employer to follow the employee's designations.
6.4 The employer may, but is not required to, invest deferred
compensation at least monthly in the investment vehicles pro-
vided for in this Plan. All amounts of deferred compensation,
whether or not invested by the employer, shall at all times
be and remain an asset of the employer. Any and all dividends,
capital gains distributions, interest or other income payable
on any of the employer's investments of deferred compensation
also shall be an asset of the employer. The employer shall
have the sole right to vote any shares of stock which it may
acquire by such investment.
6.5 Neither this Plan or any Participation Agreement nor any book
account shall be deemed to create a trust or custodial
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account on behalf of, or for, the benefit of any participant
of the Plan or his beneficiaries. No participant of the
Plan or his beneficiaries shall have, by reason of the Plan,
Participation Agreement, or book account, any secured or
preferred interest in, or to, any assets of the employer.
The employer shall have only a contractual obligation to pay
the benefits due the participatn under the Plan.
6.6 All amounts of compensation deferred under this Plan, all
property and rights purchased with such amounts, and all in-
come attributable to such amounts, property or rights shall
remain (until made available to the participant or other
beneficiary) solely the property and rights of the employer,
without being restricted to the provision of benefits under
this Plan, subject only to the claims of the employer's
general creditors.
SECTION 7. DISTRIBUTION OF BENEFITS:
7.1 Election -- Each participating employee must elect the payout
options and the payout periods for each event stated in
Sections 7.2, 7.3, 7.4, and 7.5, at the time of signing each
Participation Agreement.
7.2 Retirement -- In the event of retirement, the full benefits
credited to the participant's book account plus or minus
subsequent investment gains or losses, but less any Federal
or State income taxes required to be withheld, shall be dis-
tributed to him in anyone or more of the following ways:
A. In a lump sum.
B. In monthly, quarterly, semi-annual or annual installments
over a period not to exceed 10 years from date distri-
bution began or over a period established by the employer
not greater than the life expectancy of the participant;
or, for a participant eligible for an annuity payout
option; installments during the lifetime of the partici-
pant with a provision for a period certain. Life
expectancy shall be determined once by the employer, on
the date of the initial installment distribution. In-
stallment distributions will be made in substantially
equal payments, but no payment shall have a value of less
than (the smaller of) $50 or the balance credited to the
participant's book account.
C. Postpone payments under A. and B. above until participant
reaches his 55th, 60th, 65th or 70th birthday.
Participant's book account balances may continue to be invested
until -- in the employer's sole judgment -- cash is to be
withdrawn for payment of benefits. Payment of benefits will
commence on the first day of the third month following termina-
tion of employment. Payment of benefits under C. will commence
on the first day of the month following participant's birthday.
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7.3 Disability -- In event of termination of employment by reason
of disability, distribution of benefits will be as provided
in Section 7.2.
7.4 Other Termination -- In event of termination of employment by
reason other than those specified in Sections 7.2 and 7.3,
then the full benefits credited to participant's book account,
plus or minus subsequent investment gains or losses, but less
any Federal or State income taxes required to be withheld,
shall be distributed to him in anyone or more of the following
ways:
A. In a lump sum.
B. In monthly, quarterly, semi-annual, or annual installments
of substantially equal payments over a period not to
exceed seven (7) years from date distribution began, but
no payment shall have a value of less than (the smaller
of) $50 or the balance credited to the participant's book
account.
C. Postpone payments under A. and B. above until participant
reaches his 50th, 55th, 60th, or 65th birthday.
The employee shall elect the method of distribution at the time
of signing each Participation Agreement. The employer shall
make distribution by any of the foregoing methods or combin-
ations thereof. Participant's book account balances will con-
tinue to be invested until -- in the employer's sole judgment
cash is to be withdrawn for payment of benefits. Payment of
benefits under Section 7.4A and B.will commence on the first
day of the third month following termination of employment.
Payment of benefits under Section 7.4C will commence on the
first day of the month following the participant's birthday.
7.5 Death -- In event of the death of any participant, either
before or after termination of employment, then the full
benefits credited to his book account, less any Federal or
State withholding taxes required by law, shall be distributed
to his beneficiaries in the manner designated in the partici-
pant's Participation Agreement. The employer shall, in the
case of lump sum payment, make payment 90 days after notification
of death of the participant, in compliance with any State
laws governing the payment of death benefits.
7.6 Financial Catastrophe -- In the event of financial catastrophe
affecting a participant where the withdrawal of funds would
be necessary to prevent great hardship to the participant
and the amount necessary to meet that financial catastrophe,
and is not reimbursed by insurance, a participant may apply
to the employer for such amount from the Plan prior to retire-
ment or to termination of participant's employment with the
jurisdiction.
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.
Examples of such need under the foregoing criteria may be
catastrophic illness, flood, fire, earthquake, death in the
family, or disabling injury, or examples of similar impor-
tance. Withdrawals for expenditures normally budgetable, such
as downpayment on a home, purchase of an automobile, or
college expenses, will not be permitted. Any amount so
approved hereunder for withdrawal shall be paid to the parti-
cipant in a lump sum. The withdrawal shall be effective at
the later of the dates specified in the participant's appli-
cation or the date approved by the employer.
SECTION 8. EMPLOYER PARTICIPATION:
Notwithstanding any other provisions of this Plan, the employer
may make additional deposits in the deferred compensation fund as
additional compensation for services to be rendered by the employee
to the employer during an employment period; provided,
8.1 The employee has elected to have such additional compensation
deferred, invested, and distributed, pursuant to this Plan,
prior to the employment period in which the compensation will
be earned, and
8.2 That such additional deposit shall not exceed the maximum
deferral permitted by Section 5.
SECTION 9. NON-ASSIGNABILITY:
To the fullest extent permitted by law, the interest of a partici-
pant in the contractual obligation of the employer, established by
the Plan, shall not be assignable in whole or in part, directly or
by operation of law or otherwise, in any manner and no right or
interest of a participant in the employer's contractual obligation
shall be liable for or subject to any obligation or liability of
such participant.
SECTION 10. MISCELLANEOUS:
10.1 Status of Participants -- Neither the establishment of the
Plan nor any modification thereof, nor the establishment of
any book account nor the payment of any benefits, shall be
construed as giving to any participant or other person any
legal or equitable right against the employer except as herein
provided; and, in no event shall the terms of employment of
any employee or participant be modified or in any way affected
hereby.
10.2 Condition of Plan -- It is a condition of this Plan, and each
employee by participating herein expressly agrees, that he shall
look solely to the general assets of the employer for the pay-
ment of any benefit to which he is entitled under the Plan.
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.
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10.3 Governing Law -- This Plan shall be construed, administered,
and enforced according to the laws of the State of California.
10.4 Designation of Beneficiaries -- Each participant shall have
the right, by written notice to the employer, to designate
beneficiaries to receive any benefit to which said participant
may be entitled in the event of his death prior to the com-
plete distribution of benefits. If no such designation is in
effect on a participant's death, his beneficiary shall be his
estate, or if no executor or administrator is appointed within
six (6) months after the participant's death, the employer
shall direct said benefits to be paid to the beneficiary or
beneficiaries designated in his last Will, or if there be no
Will, then to the heirs at law of the participant.
SECTION 11. AMENDMENT AND TERMINATION:
11.1 The employer may, at any time and from time to time, modify,
amend, or terminate the Plan in whole or in part (including
retroactive amendments) or cease deferring compensation pur-
suant to the Plan, by delivering to each participant a written
copy of such modification, amendment, or termination, or of
a notice that it ceased deferring compensation; provided,
however, the employer shall not have the right to reduce or
affect the value of any participant's book account or any
rights accrued under the Plan prior to such modification,
amendment, termination, or cessation.
11.2 In the event of the termination of the Plan by the employer
under Section 11.1, the value of all participant's book account
shall be distributed to the participants or their beneficiaries
in lump sums on the sixtieth (60th) day after termination of
the Plan.
SECTION 12. EMPLOYER NOT RESPONSIBLE:
The employer may, but is not required to, invest funds held pursuant
to agreements between participants and the employer in accordance
with the requests made by each participant at the time of enroll-
ment or change in enrollment, prospectively only. The employer shall
retain the right to approve or disapprove such investment requests.
Any action by the employer in investing funds, or approving of any
such investment of funds, shall not be considered to be either an
endorsement or guarantee of any investment, nor shall it be considered
to attest to the financial soundness or the suitability of any in-
vestment for the purpose of meeting future obligations as provided
in Section 7.
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